Backing out of contract, seller threatening to sue (investment, fees, prices)

[tjay]

Originally Posted by macrodome2

I haven't read all of the responses, so someone may have already suggested this, but if they sellers persist, you could threaten to bring in the state/fed EPA since this is a dumping site. Old car batteries are toxic and it would cost them a fortune to have to clean up that site. It would be easier to just let you walk away rather than have you call in the state/federal departments.

I'd also check with the town to make sure the property doesn't already have some summons or paperwork related to the toxic garbage dumped on the property and demanding to clean it up.

Well as far as we know there are not car batteries, but just regular batteries....spark plugs, plastic reflectors, etc. I did see two very old gas cans on the property at one point, but they are gone now. The executors KNEW the owner, they were friends w/him, had been to this property many times. They HAD to know of the dumping. But I don't know if it's illegal to sell land that was used for dumping, so I'm not sure if that will help us....?

[JanND]

I'd contact these folks https://www.epa.gov/ They may have agents that can determine the environmental hazards for you. I personally think that you have a strong case. Make sure that you've saved all communications, texts, letters, not just the contract. Also, did you take pics before and after the snow melted and allowed you to see the true condition of said property??
All of this info is relevant and will support you in voiding the contract....There are disclosure laws for this type thing....and it sounds like they hid these facts.

[jackmichigan]

Originally Posted by JanND

I'd contact these folks https://www.epa.gov/ They may have agents that can determine the environmental hazards for you. I personally think that you have a strong case. Make sure that you've saved all communications, texts, letters, not just the contract. Also, did you take pics before and after the snow melted and allowed you to see the true condition of said property??
All of this info is relevant and will support you in voiding the contract....There are disclosure laws for this type thing....and it sounds like they hid these facts.

I don't see any evidence that would give rise to EPA or even state involvement. Even if this property were contaminated with hazardous substances to some degree, the EPA usually only gets involved in very significant contamination sites which pose a threat to the community.

I'm quite sure that most states do not have disclosure requirements for vacant land. Most states follow federal law as it pertains to protections regarding real estate--meaning that regulations are geared towards residential property of 1 to 4 units. Purchasers of other types of property (e.g. commercial, industrial, apartment complexes and vacant land) are assumed to be more sophisticated and able to protect their own interests through their own due diligence.

Here's the excerpt from Michigan's disclosure law:

565.952 Applicability of seller disclosure requirements.
Sec. 2.

The seller disclosure requirements of sections 4 to 13 apply to the transfer of any interest in real estate consisting of not less than 1 or more than 4 residential dwelling units, whether by sale, exchange, installment land contract, lease with an option to purchase, any other option to purchase, or ground lease coupled with proposed improvements by the purchaser or tenant, or a transfer of stock or an interest in a residential cooperative.

[jackmichigan]

Originally Posted by tjay

So the sellers think the parcel IS clear of debris... do we just keep repeating that and do nothing else? They have tried to 'clean it up' twice now, and it's still full of junk, albeit less junk than originally. We weren't sure if we should give them all our pictures/emails/evidence to try and dissuade going to court....hoping it would scare them into signing the cancellation. We asked our lawyer if the May 1st date had any significance and they didn't respond (this was via email, nearly the whole transaction has been via email w/our lawyer...in fact, it's just a paralegal we've been working with, not sure if the lawyer is even aware that we exist!) At this point we are having difficulty with our lawyer (who hasn't said too much except that we need to find a different lawyer who will litigate, because they don't do this type of thing, and we are still waiting to hear from the them regarding our last conversation....they don't move too quickly), on top of the mess with the sale. But regardless of our crappy lawyer, we still need to figure out next move.....email the sellers directly if the lawyer won't do it? Give them all our evidence? Or just state what you're suggesting?

Probably. Either that or make the assertion that they have not lived up to the contract and that you now consider the contract to be void since their failure made the contract voidable.

The "lawyer" that you hired should be making these contacts. Have the lawyer send the photos with a strongly worded letter regarding their breach of the contract (and noting that the bulldozing made things worse). I think the lawyer helped get you into this mess and the lawyer should be helping you to finalize the contract one way or another. (And they really should do that at no extra charge.) This is not at the litigation stage--it is still in the contract stage. Still, it might be good to line up a defense attorney in case they do try to sue you for specific performance. If they're hard up for money, though, it's unlikely that they will want to spend money to initiate a lawsuit.

But...none of this is legal advice. You need to sit down with your attorney and figure out your next steps regarding your contract.

[jackmichigan]

FYI, just to give you an idea of some of the types of contingencies that can be included in a contract, below are some of the clauses that I used in a recent purchase of land.

12. Environmental. Seller represents that it has no knowledge of any hazardous or toxic substances, or waste that has been discharged, released, generated, treated, stored, disposed of or placed upon the Property from any source and that there is no known environmental contamination from any source on the Property. Seller shall forward to Purchaser, and Purchaser shall have a minimum of 10 days to review, all environmental reports in Seller's possession. Purchaser shall have the right to perform its own environmental assessment of the Property prior to closing this transaction and such assessment shall indicate that the Property is satisfactory and not environmentally contaminated prior to closing.

13. Conditions Precedent for Performance by the Purchaser. The obligation of the Purchaser to consummate the sale contemplated by this agreement is subject to the fulfillment of the following conditions before the closing. The Purchaser must waive conditions identified in paragraph e) below in a writing delivered to the Seller indicating that Purchaser accepts the condition of the Property.
<snipped a, b, c & d>
e) Purchaser may conduct due diligence required in their sole discretion including by way of example and not by way of limitation, investigation of the following:

- Survey
- Environmental
- Inspection of any buildings, structures or infrastructure
- Existing leases, tenants, occupants, easements not of record, encroachments, claims of others
- Title insurance commitment

14. Termination. If Purchaser is not obligated to complete this agreement because a condition precedent is not met, Purchaser may terminate this agreement by notifying the Seller of the intention to terminate this agreement and the reason. The Purchaser may waive any obligations of the Seller without prejudicing the right to subsequently assert other conditions or to make a claim against the Seller for the breach of a condition or warranty.

[CGab]

Originally Posted by tjay

We took out a personal loan, and it's not part of the contract. It's for cash sale. We did send them a cancellation, that's when they threatened to sue us. Our attorney sucks, yes.

I'd get a new lawyer.

[NoMoreSnowForMe]

Originally Posted by tjay

I asked our lawyer if they needed the 'good faith' down payment (or whatever it's called) and she just told me 'we can do that later', then it just never happened? The sellers never demanded it or asked, so nobody followed through I guess.

Once the sellers told us the trailer was removed, we went to look at the property and saw endless amounts of garbage everywhere. We told our lawyer we wanted to cancel the deal and so they sent a cancellation to their lawyer, and we all hoped they would sign it. Instead they went to the property, bulldozed everything into oblivion (they removed some larger items into a dumpster), and called it good. (damaged a tree too, which now needs to be removed as it will most likely die). The sellers said, 'we cleaned it up if you want to go inspect it'. They sent pictures to our lawyer showing a clear property....very misleading because the angles and distance the pictures were taken showed nothing in the form of debris. So I went out there and took my own pictures, which were a much different story. Their lawyer hasn't seen our evidence yet, has no idea of what actually happened. So our lawyers told them we still wanted out, that's when they threatened to sue us.

One thing the contract to purchase states is that closing must happen on May 1st, 2019. I'm not sure if that is relevant, but if we don't close by that date (which we won't....ever), does that mean anything? Everything is a mess so far so I'm not sure if that date has significance.

The May 1st date only has significance in that it means the contract didn't happen as originally agreed. That means they can then try to sue you for not meeting the terms of the contract.

So, then they could file suit against you for breaching the contract. And then, if it was me, I'd send them a letter per my other post, telling them that if they file suit, you'll file a counter-suit, etc., etc.

It's just a date that establishes when they could try to sue you for not complying with the agreement. It in no way means they would win any suit against you - which I seriously doubt they could ever do, and they'd probably end up in serious trouble themselves.

It's really entirely possible that it would be cheaper for these people to just keep this property than to ever have to legally deal with the toxic waste situation.

[NoMoreSnowForMe]

Originally Posted by tjay

Thank everyone for your comments and insights....you've been super helpful. Noted: don't buy on Craigslist and use a real estate agent!

I have to say that not all real estate agents know the law, either.

I really don't see where you did anything wrong, whatsoever, as far as how you dealt with this, or the wording of your contract. I don't think any real estate agent would have afforded you any better guarantee, and they would have just added another layer of legal problems - them trying to get the sale to go through so they would get their commission, etc.

Not having that layer there, with someone trying to get a commission, means it's much easier for you to negotiate getting yourself out of this contract, in my opinion.

[NoMoreSnowForMe]

Originally Posted by Diana Holbrook

*In our area* Land contracts always have a feasibility period. Similar to inspection period on a house, but typically a much longer period, when the buyer investigates whether their plans for the property are feasible. This can include actual inspection and walking/digging on the property itself, inquiries with the county and other regulatory entities about history, mapping, zoning, wetlands and other permitting issues. Sometimes this feasibility runs through the whole permitting process, so the sale doesn't close until all needed permits are approved. Sometimes these feasibility studies can take months.

One important distinction in our contracts is that there are two paths the contract terms can take, and it is decided at the beginning. In one path, buyer must opt OUT of the contract by the decision date.... the other, the buyer must opt IN at the end and declare the feasibility contingency is satisfied... Or not.

Obviously, there is a different process for rescinding each one. This is why the particular contract language used in THIS contract needs to be understood. There is a process for ending the contract, if not spelled out in the contract, in your local common and real estate law.

What needs to happen is OP needs to instruct his attorney who prepared the paperwork so far, to formally end the contract. Whether in your area it is called a cancellation, or rescission, or termination, or whatever.. I would do that ASAP.

I think the threat to sue is probably not going to go anywhere... but you do need to know how to legally put this deal out of its misery.

And then going forward, if you want to buy land, find a good real estate agent who is responsive and is well familiar with vacant land sales. They are a little bit different animal than home sales. Different process, different contracts, different considerations and skills needed.


And good luck with that.

Very true that land sales are different. I bought 2 acres in WA and knew that there were a lot of trees on the property I could sell for enough money to pay for a well, but I needed the contract to NOT have a timber clause - a clause in the sales contract that said I could not sell any trees on the property until it was paid for. Ironically, the guy I bought the property from, bought property in order to cut down the trees to sell them. He cut down all the trees on my property (before I bought it) for the money, but left trees along the road, thinking nobody would buy the lot without the screen along the highway. The property was a shallow triangle-shape, with the long end along the highway.

When I learned of the value of the trees on my property, and then discovered that my contract had no timber clause, I hired some loggers to cut down the trees along the highway that were worth selling (leaving the smaller ones), intending to use the money to pay for a well.

The seller (I had an owner-contract) came barreling onto the property threatening to sue me, stopped the loggers who were working and who knew he had a reputation for suing and didn't want to be sued. I told him our contract had no timber clause (after first trying the female crying routine, as I was a single woman, and it didn't work), and if he sued me, he'd lose and now he's cost me a ton of money with the loggers waiting around to see what they should do. The boss of the loggers spoke up and said, you know, if she puts the well in with the money from the trees, and you foreclose on her, the property will be worth a lot more money with a well on it... So, he ended up leaving things alone, and he ended up getting all of his money, on time, every month - and I made a great profit on that property just a couple years later, with the improvements.

But, yes, land sales are different. You usually need more money down, if you do it through a bank. But, since they're so much harder to get bank financing for - it's also MUCH easier to get owner financing for land property. If you know real estate law, which is not that hard to learn, you can handle your own deals. But, of course, it has to be something you would enjoy studying in the first place. Otherwise, of course, hire someone and take your chances that they are actually smarter than you. And less lazy.

[oldtrader]

`Thought: Your contract said they were to remove all debris from the property. Insist this include it includes all buried debris which is all over the property.